Administrative law – Statutory
corporation – Natural justice –
Whether statutory corporation
obliged to observe rules of
natural justice in the course of
its business – State Houses
(Allocation Policy and
Implementation) Commission Law
1984 (PNDCL 83).
The plaintiff and the 1st
defendant were tenants of the
2nd defendant, a statutory
corporation, occupying two rooms
each in the property in issue
when the corporation sold the
premises to the plaintiff. The
1st defendant resisted the
plaintiff’s attempt to recover
the premises and the plaintiff
instituted an action in the High
Court for a declaration that she
was the sole lessee of the
premises. The trial judge found
for the defendants and the
plaintiff appealed on the ground
inter alia that the allocation
of the disputed property to the
plaintiff by the 2nd defendant
corporation was in violation of
the rules of natural justice as
persons who would be affected by
the allocation were not granted
a hearing by the 2nd defendant
corporation. Counsel contended
further that the sale was in
violation of State Houses
(Allocation Policy and
Implementation) Commission Law
1984 (PNDCL 83) as the disputed
premises comprised two separate
units numbered 181A and 181B.
Held:
(1) It was an elementary
principle of law that the rules
of natural justice applied only
to a body having legal authority
to determine questions affecting
the rights of others and having
the duty to act judicially. The
appellant had not shown that the
respondent had a legal duty to
determine questions affecting
the rights of persons or act
judicially. The sale transaction
by the 2nd defendant was
administrative, not judicial or
quasi judicial act. The 2nd
defendant had the discretion to
decide to whom it would sell its
property. The ground of appeal
thus failed.
(2) PNDCL 83 provided that no
person should acquire or own two
houses constructed or provided
by any State agency, without
reasonable justification. The
record showed that the disputed
property was one, not two
houses. Accordingly PNDCL 83 was
inapplicable.
APPEAL against the judgment of
the High Court to the Court of
Appeal.
Gollo
for the appellants.
I R Quansah
for the respondent.
LUTTERODT JA.
House No 181, Kwadaso, a
four-room premises, is the
property of the 2nd defendant,
the State Housing Corporation.
The parties were at one point in
time or the other tenants of the
corporation, with each occupying
two rooms in the said property.
The plaintiff-respondent (to be
hereinafter known as the
“respondent”) claims that her
tenancy of the portion she
occupies which is described as
181B, commenced on 8 December
1962, while the
defendant-appellant (to be
described hereinafter as
“appellant”) was a tenant of No
181A from October 1970.
In February 1981, the landlord,
the corporation sold the
premises to the respondent and
evidenced same by a lease
agreement made on 26 March 1985.
When her attempts to dispossess
the appellant, to enable her put
her children in occupation
failed, she instituted an action
in the High Court for a number
of reliefs, the principal one
being: “A declaration that
plaintiff is the sole lessee of
estate house No 181.”
Not satisfied with the
circumstances under which the
entire premises came to be sold
to the respondent, the appellant
not only filed a defence
alleging fraud, but
counterclaimed inter alia for “a
declaration that the purported
sale of house No 181A and the
consequent lease made thereon
was null and void on the ground
of fraud.”
The trial judge found in favour
of the respondent, prompting the
appellant to lodge this appeal
against the decision on a number
of grounds. Ground 4 of the
additional grounds of appeal
reads:
“That the 2nd defendants by
allocating Kwadaso Estate House
No 181A to the 1st defendant as
evidenced by their letter of 9
October 1970 (exhibit 2) and
without just cause selling the
same house to plaintiff
respondent having regard to
their letter of 17 October 1977
(exhibit 3) acted wrongfully,
contrary to State Houses
(Allocation Policy and
Implementation) Commission Law
1984 (PNDCL 83).”
It was submitted with respect to
this ground of appeal that the
premises in dispute was made up
of two units – 181A and 181B;
and consequently the sale of
both units to the respondent
amounted to a sale of two
houses, an act which was clearly
forbidden under the provisions
of the State Houses (Allocation
Policy and Implementation)
Commission Law 1984 (PNDCL 83).
Counsel’s contention then is
that the combined effect of
sections 3 and 7 of the above
Law completely nullifies the
sale and the same ought to be
set aside. Counsel for the
respondents answered the
submission simply that the
premises in question comprised
only one, not two houses, and
consequently s 3(1) of PNDCL 83
did not avail the appellants.
It is not disputed that at the
time of the sale, the premises
were made up of two units, 181A
and 181B. The question raised by
these arguments is whether the
property sold by the corporation
to the respondent comprised of
two houses or one house. I have
no doubt in my mind that only
one house was sold and
consequently as counsel for the
respondent has rightly argued,
the provisions of PNDCL 83 have
not been violated in any way.
Why do I say what was sold her
was only one house? The burden
no doubt rested on the appellant
who asserted to lead evidence in
support of the fact that two
houses were sold to the
respondent. Her evidence in
chief however belies that fact.
She deposed as follows:
“Sometime ago I forwarded an
application to the State Housing
Corporation for the purchase of
the one half portion of the
house which I occupied.”
This evidence clearly shows that
there was one house, which has
been apportioned into two. The
reply to her application, which
she tendered as exhibit 3
confirms that 181 is only one
house, albeit it being shared by
two families. It will be
worthwhile reproducing the body
of that letter it reads:
“We refer to your letter dated
23 September 1977, and note that
the house is being shared by
you and another family. We
therefore anticipate a number of
problems cropping up. Under the
circumstances we find it
difficult to sell yours
to you.”
This fact, namely that 181 was
being shared by two families was
reiterated by the appellant’s
counsel himself as he sets forth
the appellants case during his
cross-examination of the 2nd
defendants witness. The answer
given strengthened the
appellants. I reproduce both
question and answer.
“Q. Are you aware that your
corporation refused to accept
the application by 1st defendant
for lease in respect of the
portion of the house she
occupied because the
corporation felt that, if done
would create problems since
the house is shared by two
families.
A. Yes.”
Finally we look at the exhibit A
evidencing the sale, and we find
only one property described as
181 as the only property
involved. The schedule likewise
describes only one property
measuring 125
´
70. In my view then the sale
does not offend any provision,
express or implied of PNDCL 83,
and the same cannot be described
as wrongful, thereby
necessitating it being set
aside. The appeal on this ground
must fail.
It was next submitted with
respect to ground (1) that the
sale to the respondent was in
violation of the rules of
natural justice namely the audi
alteram partem rule. The
argument was that public
corporations whose actions are
bound to affect others must give
those parties a hearing.
For the appellant therefore it
was urged that since the
corporation, a statutory body,
was taking administrative steps
to dispose of the property, the
failure to give the appellant a
hearing amounted to a breach of
the rules of natural justice.
Furthermore, that their conduct
was wholly fraudulent and the
sale consequently ought to be
set aside.
It is an elementary principle of
law that the rules of natural
justice would only apply to a
body having legal authority to
determine questions affecting
the rights of others and having
the duty to act judicially.
As between the parties to this
appeal, the appellant has not
shown that the respondent has
any legal duty or authority to
determine questions affecting
the rights of others, let alone
the duty to act judicially.
Secondly on counsel’s own
showing the pre-sale actions
taken by the corporation were
all administrative (not judicial
or quasi judicial) steps. The
corporation in that capacity was
to exercise its discretion as to
whom it should sell its
property. It has not been shown
that the respondents had the
duty to act judicially and they
were thus not obliged to observe
the rules of natural justice.
Accordingly the appeal on this
ground must also fail.
Finally, I find no fraud proved
from the circumstances of this
case. In my opinion, depriving a
co-tenant of a shelter is
against social justice and the
policy of governmental bodies
would not constitute fraud. In
any case I have found no
government policy has been
ignored, breached or violated in
any way. In the circumstances, I
do not think we should disturb
the learned trial judge’s
decision. I would dismiss the
appeal.
SAPONG JA.
In this appeal the 1st defendant
is saying that she and plaintiff
are all staying in house No 181,
Kwadaso, Kumasi, numbered as
181A and 181B. They are staying
in this house as tenants of
State Housing Corporation. State
Housing Corporation is the 2nd
defendant.
Then in 1985, the 2nd defendant
leased house No 181 to the
plaintiff for 99 years and the
plaintiff took steps in the
circuit court to eject the 1st
defendant and also to claim
damages from her for trespass
and a declaration that the
plaintiff was the sole lessee of
the estate house No 181 Kwadaso,
Kumasi.
The defendant-appellant resisted
this claim of the
plaintiff-respondent at the
Circuit Court, Kumasi and lost
and so has appealed to this
court for the judgment, costs
and all orders against her to be
set aside.
Learned counsel for the
appellant tried to impress upon
this court that No 181 consists
of two separate unit houses, viz
181A and 181B and therefore the
State Housing Corporation
leasing the two unit houses to
the plaintiff had sinned against
PNDCL 83 of 1984. This law
forbids one person to own two
houses belonging to State
Housing Corporation unless
reasonable justification has
been shown; section 7 thereof
made PNDCL 83 retrospective. It
says before the commencement of
the Law no person shall acquire
or own two houses constructed or
provided by any State agency,
without reasonable
justification. The house in
question was built by the State
Housing Corporation. This fact
is not in doubt. The State
Housing Corporation regards this
house as one house and not two
houses. The lease was exhibit A
which was tendered in the court
below, puts the point beyond
doubt that the house is one and
not two. That being so I do say
that PNDCL 83 is inapplicable.
Therefore I am not in the least
surprised that learned counsel
for the plaintiff-respondent
says emphatically that PNDCL 83
is inapplicable.
Learned counsel for the
appellant says further that
State Housing Corporation is a
public corporation. It has the
right to sell or not to sell.
That being so persons that might
be affected in the event of a
sale have to be heard.
The plaintiff-respondent was
occupying half of the house and
the defendant-appellant was also
occupying the other half of the
house. So it is contended that
the parties should have been
heard before the sale of the
said house. The State Housing
Corporation did not hear them in
the sale and so the sale should
be faulted.
I do not share this view. The
landlord of 181, Kwadaso Kumasi
is